Many of the game tournaments that are held in New Jersey—from a regional Scrabble championship to a Magic: The Gathering Grand Prix—may be illegal. As we’ve seen in other jurisdictions, the problem is tied up in laws meant to restrict gambling. According to the state’s constitution:

New Jersey Constitution (1947), Article IV, Section VII, paragraph 2: No gambling of any kind shall be authorized by the Legislature unless the specific kind, restrictions and control thereof have been heretofore submitted to, and authorized by a majority of the votes cast by, the people at a special election or shall hereafter be submitted to, and authorized by a majority of the votes cast thereon by, the legally qualified voters of the State voting at a general election, except that, without any such submission or authorization.

To most gamers, that wouldn’t seem to be a problem. After all, the games we’re talking about aren’t gambling, they’re games of skill, right?

In fact, that is the differentiating factor in many states. A game of chance may be gambling, while a game of skill is not. However in New Jersey, a 1982 case involving a Backgammon tournament determined that games involving dice qualified as gambling, whether or not there was also a degree of skill.

Boardwalk Regency Corp. v. Attorney General, 188 N.J. Super. 372 (1982): But this recognition of the skill factor is not determinative on the issue of whether chance plays a material or immaterial role in the outcome of the activity. Indeed, the statute acknowledges that a game may be a “contest of chance” “notwithstanding that skill of the contestants … may also be a factor therein.” Thus, the proper focus of the inquiry here is not on the level of skill which may affect the outcome of the contested activity but rather on whether the element of chance is a factor that is material to the final result…

This report, offered by plaintiffs and admitted by the participant, Magriel, to be an accurate account upon examination by the court, removes all doubt from this court that the element of chance plays at least a material role in determining the outcome of this activity on which money is risked, no matter how much it is claimed that the role of skill predominated or allowed the finalist to reach that stage in the tournament.

Certainly, many game tournaments that charge an entry fee, award prizes, and use dice take place in New Jersey without interference. It would seem, however, that their freedom depends on a failure to enforce the law.

But government enforcement isn’t the only danger. Every year, a number of national amateur skill contests (like baking competitions) are closed to New Jersey residents. Risk-averse attorneys read the Boardwalk case and, afraid that any element of luck might land their clients’ contests in hot water, advise against allowing participants from New Jersey.

Ever so attentive to the plight of their constituents—for example, 16-year-old Patrick Carney, who was prevented from entering a National Geographic photography contest—New Jersey legislators recently passed, and the governor signed, “an act providing that participation by New Jersey residents in contests of skill does not constitute unlawful gambling”:

New Jersey Permanent Statutes, Title 5, Section 19: Notwithstanding the provisions of any other law to the contrary, participation by a New Jersey resident in a contest of skill in which a participant pays an entry fee for the opportunity to win a monetary prize or something else of value shall not be considered a game of chance, shall not constitute unlawful gambling under the laws of this State, and shall not subject the participant or the sponsor of the contest of skill, or any officer, employee, or agent of the sponsor, to any civil or criminal liability under the laws of this State that prohibit gambling.

But, you know how these things go. The new law further declares:

For the purposes of this section, “contest of skill” means any baking or photography contest, and any similar contest that is approved as a “contest of skill” by the Attorney General, provided that the winner or winners are selected solely on the quality of an entry in the contest as determined by a panel of judges using uniform criteria to assess the quality of entries. A “contest of skill” shall not include any contest, game, pool, gaming scheme or gaming device in which the outcome depends in a material degree upon an element of chance. A “contest of skill” shall also not include any casino game, any sports wager or sports wagering scheme, or any Internet gaming of any kind.

So now, any game tournament that charges an entry fee and offers a prize is unlawful in New Jersey unless the results are unaffected by chance (no dice, no card draws, etc.), the winner is determined by judges, and the game is approved the Attorney General.

4 Comments

The NJ statute you posted doesn’t seem to have the outcome you claimed unless there’s more to the law than you posted. It’s defining an exception to unlawful gaming, not defining what unlawful gaming is. So your last sentence seems wrong to me.

Hmm… I see what you’re saying. And you’re right. The new law doesn’t on its own make game tournaments illegal. However, in defining a contest of skill the way it does, it leaves out an obvious category of events, games. So then we have to go back and look at earlier law, where the case history states that game tournaments are illegal gambling.

Perhaps my use of the word “now” in that last sentence was not for the best. It’s not that game tournaments are newly illegal. Rather, they have been illegal for some time (even if not enforced) and a new law that might have fixed the situation didn’t.

The Boardwalk case is interpreting a statute. There are probably statutes defining “gambling,” “contests of chance,” etc. We’d have to look to those statutes to see what the lay of the land is. After all, there are other legislative exceptions – casino gambling is, I believe, legal in parts of NJ. Anything that doesn’t fit the statutory definition of “gambling” or “contests of chance” may not need the new exception to begin with. We’d want to do research, for instance, to see whether a chess tournament with an entry fee isn’t even covered by the common law or statutory definitions of “gambling” or “contests of chance” to begin with (or if it already has a legislative exception). Only then would we look to apply the new law. Without doing more research I couldn’t tell you what the result is for any particular type of game. Keep in mind that anything that isn’t “gambling” or a “contest of chance” to begin with may not require a nod from the Attorney General, a panel of judges, etc., since the new law is an exception to the existing laws.